William Blair Initiates Coverage on SK Hynix ADR: $260 Price Target Implies 82% Upside
Claire Weston
William Blair initiated coverage of SK hynix's ADR with an Outperform rating and a $260 target, implying 82% upside; the analyst argues the U.S. listing should help close a valuation gap that leaves SK hynix at nearly half Micron's multiple.
Where does the $260 target come from?
Analyst Sebastien Naji set a $260 price target, implying roughly 82% upside from Monday's close of $142.72.
The core logic: SK hynix trades at just 6.1× forward P/E for fiscal 2026, versus 11.3× for Micron — nearly half the multiple.
This means → Naji is not betting that SK hynix is a better company; he is betting that the valuation gap is too wide and should narrow. In plain terms = two companies doing the same AI-memory work, yet one is "priced" at almost half the other in the U.S. market — the analyst says that disconnect won't last.
Why is the U.S. listing the key variable?
SK hynix completed its ADR — American Depositary Receipt, a vehicle that lets foreign shares trade on U.S. exchanges — listing in mid-July this year; the stock currently sits about 4% below its offer price.
Naji argues the listing brings "longer-term market visibility and a stronger link to AI and data-center end markets."
This means → SK hynix previously traded mainly in Seoul, making it hard for U.S. fund managers to own. The ADR opens that channel, giving the valuation gap a mechanism to close.
Does the AI-memory story hold up?
Naji calls SK hynix the "memory leader for the AI era" and highlights its partnership with Nvidia as tighter than Micron's.
On the same day as the initiation, SK hynix and SanDisk jointly released a technical-roadmap specification for High-Bandwidth Flash (HBF) — this signals the company is actively shaping the next-generation AI-memory standard, not just supplying it.
Naji notes that AI memory's premium pricing and the slow ramp of new supply should keep margins elevated. In plain terms = the memory parts that AI chips need are in short supply, prices have room to hold, and new capacity is arriving slowly — so profit margins are unlikely to fall soon.
Where is the risk?
SK hynix, Micron, and Samsung have all rallied sharply this year on AI-infrastructure demand, but the past month has been choppy as the market debates whether AI capital spending can be sustained.
Naji acknowledges that whether the valuation discount narrows as expected is the make-or-break test for this bull case.
This means → if U.S. investors ultimately refuse to value SK hynix on par with Micron, the 82% upside evaporates — this is a bet on market perception, not just on fundamentals.
Content is for reference only, not financial advice.